« AnteriorContinuar »
to check, and as collateral security for said, that you submit this objection to the payloan. That subsequently, on January 14, ment of same to the honorable twenty-sixth 1913, "said loan was shifted by substitu- judicial district court of Louisiana for tion, in lieu of the H. L. Bickham note, one Washington parish, in accordance with the note of the Angie Mercantile Company, and provisions of § 5 of act No. 300 of the genone note of W. E. Douglas, for $5,830 each.” eral assembly of Louisiana, for adjudication That said substitution was agreed upon be thereon.” tween Bickham, president of the Com- On receiving this petition the state exmercial Bank, and Douglas, individually, aminer of state banks presented his petiand as president of the Angie Mercantile tion to the judge of said court, who orCompany, and as a director of said bank dered the same to be filed, and service made on one part, and W. W. Warner and R. V. on the special agents in charge of said McCarthy, president and cashier, respec- banks. tively, of the Bank of Angie, on the other J. S. Brock, Jr., special agent in charge part; all subject to the same understand of the Bank of Angie in liquidation, intering and with reference to the said deposit vened, and joined t' : plaintiff in opposing and note of Bickham. Neither he nor the allowance of the claim of the ComDouglas no: the Angie Mercantile Company mercial Bank to said deposit, and prayed derived any benefit from said transaction; that the same be rejected. “and it was merely a subterfuge which was Daniel T. Cushing, special agent in adopted for the purpose of obtaining money charge of the Commercial Bank of Bogaand credit for the benefit of the Commer- lusa, filed an answer which may be stated cial Bank of Bogalusa."
as follows: “That all the transactions and arrange- 1. Respondent admits that the books of ments were made without the knowledge the Bank of Angie show a credit of $11,or consent of the board of directors of the 000 in favor of the Commercial Bank, Bank of Angie. That after they had be but denies that that sum is held by said come known to the said board of directors Bank of Angie as collateral security as alof the Bank of Angie, they immediately leged in the petition, and further denies began to demand the recalling of said that the Commercial Bank borrowed said transaction. That the president of the sum, or any part thereof, from the Bank of Bank of Angie, W. W. Warner, and the Angie. cashier, R. V. McCarthy, had no authority Respondent further averred that, on the to bind the bank in this matter, the said contrary, said Bank of Angie is and was inloan being for an amount almost equal to debted unto the Commercial Bank of Bogathe capital stock of the said Bank of An- lusa in the full sum of $11,000, for the gie."
That the said Bickham, president, was That in December, 1912, the state examacting in behalf of the said Commercial | iner of state banks, on examination, found Bank, and that the said bank is estopped that the capital of the Commercial Bank from claiming said credit of $11,000, "for had been impaired to the extent of $10,the reason that the entire proceeds of said | 684, and thereupon so notified the state loan went for the benefit of the said Com- auditor of public accounts, who notified the mercial Bank of Bogalusa, and the direc. officers of the bank that, unless said imtors of the said Commercial Bank of Boga- pairment was made good or restored withlusa knew or could have known that such in the time required by law, the bank was the case, and they further knew or would be closed in accordance with $ 17, could have known that at no time since act No. 179 of 1902, which act said loan was made would it have been amended by act No. 152 of 1910. possible for the said Bank of Angie to have That a meeting the board of directors paid said ostensible deposit.”
of the Commercial Bank was held on JanThat the said Bickham endeavored to se. uary 3, 1913, at which Houston D. Bickcure a release of a portion of said osten- ham, president, and owner of a majority sible deposit for the use of the Commercial of the stock of said bank, stated that he Bank, and for that purpose communicated would agree individually to raise, donate, with the president and cashier of the Bank and make good to the Commercial Bank of Angie, who emphatically refused to re- the sum of $11,000 to cover said impairlease any of said deposit.
ment of the capital stock. The petition closes as follows: "Peti- That said Bickham, pursuant to said tioner submits further that the purported agreement, on January 7, 1913, negotiated
ostensible claim of the Commercial a loan at the Bank of Angie for $11,000 on Bank of Bogalusa against the said Bank his personal promissory note, secured by of Angie for $11,000, as herein set out, has 110 shares of the capital stock of said not been rejected, and he therefore prays' Commercial Bank belonging to him. That
by direction of Bickham the said sum was are bound by their own acts and declaraplaced to the credit of the deposit account tions, and are estopped to urge their own of the Commercial Bank on the books of turpitude. the Angie Bank, and was also credited Respondent further averred that the on the books of the Commercial Bank for president and cashier of the Bank of Angie the purpose of making good the impair- did have power and authority under its rent of its capital stock.
charter and by-laws to bind said bank in That the Commercial Bank notified the said transaction, as to which the Comstate bank examiner that the impairment mercial Bank was an innocent third perof the capital stock had been made good son. Respondent prayed that the plaintiff's in cash as required by that official, and demand be rejected, and for judgment recogthat said deposit of $11,000 has ever since I nizing the Commercial Bank as the owner been carried on the books of the Com- of said deposit of $11,000, and, as such, mercial Bank as one of its live assets. entitled to demand and receive payment That thereafter the said bank continued thereof. Respondent made a like answer in business until May 28, 1913, when it to the petition of intervention. The case was closed by the said state bank exam. was tried, and judgment was rendered in iner.
favor of the plaintiff and the intervener Respondent denied the alleged parol, as prayed for. The defendant has apagreement between Bickham, president, pealed. It was admitted that H. H. Kenand the Bank of Angie, as set forth in nedy was a depositor of the Bank of Angie, the petition, and averred that the officers as alleged in the petition. of the Angie bank well knew that the On January 7, 19:3, Bickham executed money was borrowed for the purpose of his individual note for $11,660 to the order making good the impairment of the capital of the Bank of Angie, secured by shares stock of the Commercial Bank, and that of stock of the Commercial Bank, which said bank could not borrow money on its was owned by him. The Bank of Angie own capital stock, and that said Bick- discounted the note, and the net proceeds ham in said transaction was acting in his ($11,000) were credited to the account of individual and per 3onal capacity. That the Commercial Bank of Bogalusa, and the Bank of Angie, its officers and agents, $660 was credited to the interest account of have always carried said deposit on their the Bank of Angie. books as belonging to the Commercial McCarthy's testimony on the subjectBank, and as one of the liabilities of said matter of the alleged parol agreement with Bank of Angie. That said deposit was H. D. Bickham is, in effect, as follows: He included in the liabilities of said bank, in a was cashier of the Bank of Angie on Janusworn statement furnished by its president ary 7, 1913, and after that date the Comto the state examiner of state banks on mercial Bank never had, on the books of March 1, 1913, which a few days later was the Bank of Angie, a.credit of less than published in a newspaper in the parish of $11,000. The agreement between Mr. BickWashington, as directed by the statute. ham and Dr. Warner, president, was:
Respondent pleaded that the facts stated "That the proceeds of the note were to be estopped the Bank of Angie and its offi- placed to the credit of the Commercial Bank cers to deny said deposit, and to assert of Bogalusa, and they were not to be that there was any secret oral agreement checked against, or that they would not that said deposit should be held as col- draw below $11,000.” That the proceeds lateral security to secure the payment of of the note were pledged to the Bank of the note of Bickham, as alleged in the peti- Angie. In May, 1913, said bank refused tion. Respondent denied that the Com- to permit Bickham, as president of the mercial Bank was a party to the substitu- Commercial Bank, to draw on said detion of the notes on January 24, 1913, as posit. The witness supposed that he was alleged in the petition, or had any interest dealing with Bickham as an officer of the therein, or was privy to any of the alleged Commercial Bank. The note of Bickham parol agreements or understandings set was taken up by two notes, one signed by forth in the petition.
the Angie Mercantile Company, per W. E. Respondent further averred that, if H. Douglas, president, and the other by W. E. D. Bickham and Warner, president, and Douglas, who was also a director of the McCarthy, cashier, of the Bank of Angie, Angie bank. Notes aggregating $11,660 made any such agreement as set forth in were received by said bank, and charged article 1 of the petition, the same was to bills receivable. The Bickham note was against good morals, and a wilful fraud marked paid, canceled, and returned to practised upon the banking department of him. The debt was novated. The capital the state of Louisiana, and that the said stock of the Bank of Angie was only $15,Bank of Angie and its officers and agents '000, and the above transaction showed a loan of $11,000 to one person. On cross- transaction was not fictitious, but real, and examination McCarthy said: The note of that Mr. Bickliam wanted the credit "to Bickham was discounted, and $660 was show up as a reserve for the Commercial earned as interest by the Bank of Angie. Bank; that the transaction was only an The Bickham note for $11,660 was secured | accommodation to said bank, and the enby 110 shares of the stock of the Com- tries on the books of the Bank of Angie mercial Bank standing in Bickham's name. did not represent real money; that said This collateral was indorsed on the back bank made no profit on the transaction, of the note, but nothing was indorsed there and has never received one cent from the on showing that the money was to be held Commercial Bank for the credit of $11,by the Bank of Angie. There was no writ. 000. ten agreement between Bickham and the Mr. Rives, assistant state bank examiner, officers of the Bank of Angie. The cashier testified that the greater part of the $11,knew nothing of Bickham's authority in 000 went directly to the credit of interest the premises, except from the transaction and discount on the books of the Comand agreement. The loan was made as mercial Bank, and they do not show that Bickham negotiated it, and the agree. said credit was the result of any check that ment was that the $11,000 was to be held could have been given. Mr. Rives further by the Bank of Angie as collateral to se testified that the payment of said sum of cure the Bickham note. The cashier con- $11,000 would have taken all the cash and sidered the transaction as a loan. Bick- reserve of the Bank of Angie. ham said that he wanted the loan to use Mr. Houston D. Bickham did not testify, as a reserve, and that he would leave the and it was admitted by counsel in argumoney at the Bank of Angie as a reserve. ment at the bar that Mr. Bickham is con
The sworn statement of the condition of fined in the state penitentiary for certain the ban!. on February 25, 1913, signed by violations of the banking laws, which have the president and cashier, was taken from nothing to do with the instant case. the books of the Angie bank, and was a L. L. Richardson, former cashier of the true statement of its affairs as they stood Commercial Bank of Bogalusa, testified in on the books at that time. The item of behalf of the defendant, in substance, as liabilities in said statement was made up follows: "The Commercial Bank had to in part of the item of $11,000 due the Com- its credit with the Bank of Angie on Janmercial Bank, which appeared on the books uary 7, 1913, more than $11,000, and the
an individual deposit subject to check. account was subject to check. Mr. McThe substitution of the notes was made Carthy told him so. Mr. Bickham went at Bickham's suggestion, because one loan to the Bank of Angie and got $11,000 to of $11,000 looked too large.
make good the impairment of the capital The cashier understood that the loan stock of the Commercial Bank, and brought
for the benefit of the Commercial back a deposit slip for that amount signed Bank, which appeared in the transaction by McCarthy, cashier, reading as follows: only as the donee of the proceeds of the Commercial Bank as a depositor with the Bickham note.
Bank of Angie on note No. 1223 for $11,The two substituted notes were secured 000. This checking account never got beby the same 110 shares of stock pledged to low $11,000. The money represented by secure the Bickham note.
the deposit slip was credited as follows: The cashier acted in good faith in this 'Undivided profits of $10,684.83,' and $316 transaction, and the Angie bank refused to the personal account of Houston D. to make the loan until the agreement was Bickham. The Commercial Bank did not made to allow the money to remain in borrow any money to make good the imsaid bank as security.
pairment of its capital stock. The item of Dr. W. W. Warner, former president of resources of said bank on February 25, the Bank of Angie, as a witness, corrob- 1913, sworn to by witness and Bickham, orated the testimony of R. V. McCarthy, and published, did not include an item of the former cashier, as to the transaction $11,000 borrowed from the Bank of Anof January 7, 1913, with Jr. Bickham, gie." president of the Commercial Bank. Dr. On cross-examination the same witness Warner stated that the transaction was testified that the $11,000 was the personal had with Mr. Bickham as the representa money of Mr. Bickham, out of which he tive of the Commercial Bank, and as hav. donated $10,684 to the Commercial Bank ing entire control of its affairs; that Mr. of Bogaluga; that he knew that Mr. BickDouglas refused to sign the two su har borrowed the money, because he left tuted notes until he knew that the money the bank to go to the Bank of Angie for was to remain in the Bank of Angie. that purpose, but that he did not know
Dr. Warner further testified that the what agreement there was between Mr.
Bickham and said bank; and that Mr. Bick- a sworn statement, and under the heading ham said that he had borrowed the money of “Liabilities” was $11,000 among the himself. The witness further testified that "individual deposits subject to check." his bank got no interest on the loan from That statement was duly published in a the Bank of Angie, but paid interest on newspaper of Franklinton. The books of the loan after January 1st, because “we the bank showed, and the cashier swore carried it as a reserve.”
to the assistant bank examiner, that this Mr. McCarthy, in rebuttal, testified that deposit belonged to the Commercial Bank he never told Mr. Richardson that the de- of Bogalusa. The latter bank made posit of $11,000 was subject to check, but, similar statement, and its cashier swore on
the contrary, informed him of the the trial of the cause that said amount was details of the agreement of January 7, subject to check by his bank. 1913.
These entries on the books of the banks Mr. W. L. Young's testimony shows that and these sworn statements must prevail he, as state bank examiner, notified the over a secret oral agreement which may Commercial Bank to make good the impair- have been made between the president of ment of its capital, and told Bickham, the one bank with the officers of another bank, president, that his bank could not borrow which had for its object the concealing of money for that purpose, and that any sum the truth and the deception of the public of money advanced by officers or stock and the state officials charged with the exholders of said bank to make good said amination of the said banks with a view of impairment would be considered a dona ascertaining their solvency. It would be tion.
against public policy and good conscience it appears from the minutes of the to hold otherwise. board of directors of the Commercial Bank The Bank of Angie was a quasi public that Bickham, as an individual, undertook institution, conducting business under to raise the sum of $11,000 to make good limitations and restrictions contained in the impairment of the capital stock of statutes of the state, and it was subject said bank. The evidence shows that he dis- to examination by, and supervision of, state counted his own note, secured by his own officers. Its regularly published statements shares of stock, and that he had the pro- were sworn to by its officers, and these officeeds put to the credit of the Commercial cers will not be permitted to afterwards Bank in the Bank of Angie.
contradict these statements, and be heard The Bank of Angie issued a deposit slip to testify to the falsity of the records made for the $11,000 in the name of the Com- by them. mercial Bank, which was delivered to and If such a course of conduct were sancaccepted by the Commercial Bank.
tioned, it would be impossible for the state This was, in effect, a donation made by officers, the public, and the court to ascerBickham to the Commercial Bank, of which tain the true condition of any bank. Rev. he was president, in accordance with the Stat. 877; Wright v. Gurley, 133 La. 745, requirement of the state examiner of state 63 So. 310; Landwirth v. Shaphran, 47 La. banks, in order that the capital stock of Ann. 336, 16 So. 839; Pauly v. O'Brien that bank should be restored, so that it (C. C.) 69 Fed. 460. might continue to do business.
The policy of the law will not allow A similar condition of affairs existed in the officers of the Bank of Angie to gainthe case of the People's Bank of New Or- say or deny that which they have said and leans, which reported in 133 La. 745, done in their written documents, book en63 So. 310, in the case entitled Wright v. tries, and sworn statements to officers of Gurley, where it was held that the deposits the state and to the public. Briggs v. of checks of stockholders to make good the Stafford, 14 La. 381; Mathews v. Boland, capital stock were donations to the bank, 5 Rob. (La.) 200; Garthwaite v. Seip, 23 and could not be recovered by the stock - La. Ann. 218; Freeman v. Savage, 2 La. holders making the deposits.
Ann. 269; Morse v. United States, 98 C. C. If there was a secret oral agreement be- A. 321, 174 Fed. 539, 20 Ann. Cas. 938. tween Bickham and the officers of the Bank The legal title to the $11,000 was vested of Angie, as testified to by the latter, and in the Commercial Bank at the time that as already set forth herein, the Commer- Bickham, the president, proposed to make cial Bank was not a party thereto, and good the impairment of the capital stock it is not bound thereby. It was an in- of the bank by a donation, which was nocent third person to such agreement, and agreed to by resolution of the board of diit is not estopped to claim the donation rectors, and when he (Bickham) deposited made by Bickham to it.
that gum in the Bank of Angie to the The Bank of Angie, through its officers, credit of the Commercial Bank, and a desent to the state examiner of state banks 'posit slip for the amount was issued by the
former to the latter bank, and was ac- iana provides that every person has the cepted.
natural right to worship God according to The resolution of the board of directors the dictates of his conscience, and that no referred to, in accepting the donation from preference shall ever be given to, or any disBickham, provided that this amount be crimination made against, any church, sect,
or creed of religion, or any form of religious paid in as required by law." The bank
faith or worship. examiner required that it be paid in cash.
School · reading Bible validity. And this resolution shows that the Com
2. The reading of the Bible, including the mercial Bank was a stranger to the oral | Old and New Testaments, in the public agreement sworn to by the officers of the schools of the state, is a preference given to Bank of Angie which they said existed be. Christians, and discrimination made tween them and Bickham.
against Jews. If the depositors and stockholders of the Bank of Angie sustain loss, it is by
(March 22, 1915.) reason of the fault and wrongdoings of those to whom they intrusted the manage
ERTIFICATION by the Court of Apment of their business; and they must look
peals for the Parish of Caddo to the to the makers of the notes whose notes Supreme Court of questions arising upon were substituted for that of Bickham, when appeal by plaintiffs from a judgment of the he borrowed the $11,000 and had it placed District Court setting aside a judgment ento the credit of the Commercial Bank, on joining defendants from enforcing or carrythe books of the Bank of Angie.
ing into effect a resolution requesting the It is ordered, adjudged, and decreed that
principals and teachers to open morning the judgment appealed from be reversed, sessions of the public schools by reading and that there be judgment in favor of from the Bible, without comment, and the D. T. Cushing, special agent, liquidating offering of the Lord's Prayer. Reversed, the Commercial Bank of Bogalusa, Louisi. The facts are stated in the opinion. ana, and against petitioner, H. H. Ken
Messrs. Thigpen & Herold, for plainnedy, and intervener, J. S. Brock, Jr., tiffs: special agent, liquidating the Bank of An
The exercises complained of cannot be gie, rejecting their demands. It is further ordered, adjudged, and de Constitution.
conducted without violating article 4 of the creed that the Commercial Bank of Boga
Cooley, Const. 6th ed. pp. 571 et seq. lusa, in liquidation, is the owner, and as It is the established jurisprudence of such entitled to the deposit of $11,000, ap- Louisiana that Christianity is not part of pearing on the books of the Bank of An- the law of the state, which treats all regie, and that said Commercial Bank is en ligions alike, and accords to their followers titled to demand and receive same from
equal rights in every respect. the Bank of Angie in due course of the
State v. Bott, 31 La. Ann. 665, 33 Am. liquidation of that bank, with costs in both Rep. 224; Minden v. Silverstein, 36 La. courts.
Ann. 917; Lehman v. Lehman, 130 La. 962, 58 So. 829; Shreveport v. Levy, 26 La. Ann.
671, 21 Am. Rep. 553. LOUISIANA SUPREME COURT. Exercises in the public schools, consisting
of bible reading, constitute a violation of S. L. HEROLD et al.
and infringement upon the religious liberty
and religious equality of the Jewish and PARISH BOARD OF SCHOOL DIRECT- Catholic children attending the public ORS et al.
schools. (136 La. 1034, 68 So. 116.)
1 Jones, Ev. $ 130, p. 637; Abbott, Proof
of Facts, 634; State ex rel. Weiss v. District Constitutional law - religious liberty. Board, 76 Wis. 177, 7 L.R.A. 330, 20 Am. St. 1. The Constitution of the state of Louis- Rep. 41, 44 N. W. 967; Smith v.
Pedigo, 145 Headnotes by SOMMERVILLE, J.
Ind. 392, 19 L.R.A. 433, 32 L.R.A. 838, 33 Note. - Religious exercises or instruc- , N. E. 251, 19 Ann. Cas. 220, in which it tions in public schools.
was held that the reading of the King
James version of the Bible, repeating the This is a continuation of a note on the Lord's Prayer in the language used in that same subject, appended to Church v. Bul- version, and singing hymns, as a part of the lock, 16 L.R.A.(N.S.) 860.
exercises of a public school, violates a proExcept HEROLD V. Parish BOARD, the only vision in the state Constitution forbidding case in point, decided since the earlier note, the appropriation of any public fund or the is People ex rel. Ring v. Board of Educa: donation of money by the state in aid of tion, 245 Ill. 334, 29 L.R.A. (N.S.) 442, 92 sectarian purposes, and that requiring the